After a second federal environmental review criticized the company’s gold-copper open pit proposed for central British Columbia, Taseko Mines TSX:TKO vowed to challenge the findings. The company announced its intention on November 1, a day after a Federal Review Panel appointed by the Canadian Environmental Assessment Agency released a negative 323-page report. A final decision is up to the environmental minister and federal cabinet.

Taseko then redesigned the proposal, adding $300 million to the now $1.1-billion capex to relocate a tailings pond. The company argued the new plan would save Fish Lake, a 118-hectare body of water said to have spiritual significance for local natives.

The revamped New Prosperity proposal underwent a month of public hearings as part of the second review. The conclusion, however, was that the new plan likely would not save Fish Lake. The three-member panel concluded that “Taseko underestimated the volume of tailings pore water seepage leaving the tailings storage facility and the impacts on water quality caused by recirculation of water within the Fish Lake (Teztan Biny) and Upper Fish Creek (Teztan Yeqox) system. The panel has also determined considerable uncertainty remains regarding Taseko’s contingency plan for water treatment.”

The appointees also found the project would adversely affect the region’s already threatened grizzly bears. But the panel’s executive summary devotes twice as much space to “aboriginal matters” and “potential or established aboriginal rights and title” than it does to environmental issues.

Taseko responded that it is “committed to protecting Fish Lake and fish habitat and we strongly disagree with the panel’s findings related to the potential impact on the water quality, fish and fish habitat of Fish Lake. Taseko will challenge these findings as they contradict best practices in place around the world today and expert opinion and analysis.”

Union of B.C. Indian Chiefs president Stewart Phillip has said New Prosperity’s approval “will trigger a province-wide and nation-wide backlash that will severely jeopardize relationships between first nations and the mining industry for years to come.”